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Individual traders who start exploring algo trading might wonder who some of the largest automated traders are. Although it is hard to know the exact number, some industry reports indicate that high-frequency trading firms, or HFTs, account for approximately 50?60% of U.S. equity trading volume. I?ve compiled a list of 15 well-known HFTs, jotted down a few notes about each, and provided links to their websites for further research.
(1) Virtu Financial ? Founded in 2008 by Vincent Viola and Doug Cifu, Virtu is one of the largest high-frequency market makers globally with a particularly large presence in U.S. equities. Virtu has made some high-profile acquisitions of other trading firms and service providers including KCG Holdings and ITG.
(2) Citadel Securities ? This is the market making arm of Citadel LLC, the financial institution founded by Ken Griffin in 1990. Citadel manages over $30B in assets across multiple investment strategies. Citadel Securities was formed in 2002 and accounts for over 10% of U.S. equity trading volume.
(3) Two Sigma Securities ? Like Citadel, Two Sigma is comprised of an asset manager and a market maker. Two Sigma?s hedge fund over $50B under management, while it?s market making entity regularly trades over 300 million shares per day in the U.S. stock market.
(4) Tower Research Capital ? Headquartered in New York City and founded by Mark Gorton in 1998. Tower is active globally with many ?siloed? teams trading their own strategies using shared infrastructure and firm capital.
(5) Jump Trading ? Founded in 1999 by former pit traders Paul Gurinas and Bill Disomma, Chicago-based Jump is a large electronic trading firm that has grown to over 500 employees globally. The firm is known to have significant market share in futures markets and has also expanded into cryptocurrency trading.
(6) DRW ? Founded in 1992 by former floor trader Don Wilson, DRW is a proprietary trading firm trading many financial instruments globally. The firm has over 800 employees and was one of the first established HFTs to expand into crypto trading in 2014 through its subsidiary Cumberland Trading.
(7) Hudson River Trading ? Founded in 2002 and headquartered in NYC, Hudson River Trading (known as HRT) is a quantitative trading firm responsible for about 5% of U.S. stock market volume according to a Wall Street Journal article. The firm acquired competitor Sun Trading in 2017.
(8) Quantlab Financial ? Technology-driven proprietary trading firm founded in 1998 by Ed Bosarge and Bruce Eames. With headquarters in Houston, the firm has offices across the U.S. and Europe. Acquired technology assets from Teza Technologies in 2017 as part of industry consolidation.
(9) XTX Markets ? Founded in 2015 by Alexander Gerko, XTX is an electronic liquidity provider with over 100 employees that is particularly active in currency markets, where it is the third largest market maker by volume with over 7% market share. It is also a significant player in European equity markets with over 11% market share. The firm is a spin-off of GSA Capital.
(10) GTS ? Founded in 2006, GTS is a proprietary quantitative trading firm that is the New York Stock Exchange?s largest Designated Market Maker (DMM), where it is responsible for maintaining fair and orderly markets for more than 1,100 public companies. GTS accounts for 3?6% of daily cash equities volume in the U.S. and trades over 10,000 different instruments globally. The firm recently agreed to acquire Cantor Fitzgerald?s ETF and wholesale market making businesses.
(11) Tradebot Systems ? Founded in 1999 by Dave Cummings (who also later founded the alternative trading system BATS). Based in Kansas City and employing around 60 people, the firm specializes in providing liquidity in U.S. equities.
(12) Flow Traders ? Founded in 2004 and headquartered in Amsterdam, Flow is a publicly traded company that is known for market making exchange traded products, or ETPs. With over 300 employees, the firm provides liquidity on all major markets in Europe, the Americas, and Asia. It is particularly strong in European ETF market making, where it handles about one-third of all trading volume.
(13) IMC Financial ? Founded in 1989, IMC is a large electronic market maker in Europe, the Americas, and Asia. In the U.S., IMC is a Designated Market Maker (DMM) on the New York Stock Exchange. The company employs over 500 people and has offices in Amsterdam, New York City, Chicago, and Sydney.
(14) Optiver ? Founded in 1986 and also headquartered in Amsterdam, Optiver is a proprietary trading firm and market maker that has approximately 1,000 employees. Active globally but like Flow and IMC is a significant player in European ETF market making.
(15) XR Trading ? Founded in 2002 as a fixed income firm, XR is a Chicago-based proprietary trading firm providing liquidity in a wide range of financial instruments and asset classes.
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